Calculate the revenues needed to earn the target net income

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Reference no: EM131969060

Problem

Quick bites has a restaurant that is opened all day. Fixed costs total $450,000 per year. Service varies from a cup of coffee to full meals. The average sale per customer is $8.00. The average cost of food and other variable costs for each customer is $3.20. The Income Tax rate is 30%. Target Net Income is $105,000.

(a) Compute the revenues needed to earn the target net income.

(b) (i) How many customers are needed to break-even?

(ii) How many customers are needed to earn a net Income of $105,000?

Reference no: EM131969060

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